The Securities and Exchange Commission announced that the Honorable Marvin H. Shoob, United States District Judge for the Northern District of Georgia, entered a temporary restraining order, asset freeze and other relief against J. Scott Eskind ("Eskind"), Lorus Investments, Inc. ("Lorus"), and Capital Management Fund, Limited Partnership ("Capital"), all residing or with offices in of Atlanta, Georgia. The Commission filed a civil injunctive action against them on September 3, 2002.

The Commission's complaint alleges that Eskind is a recidivist violator who was preliminarily enjoined in June 1997 and permanently enjoined on January 12, 1998 from violating the antifraud provisions of the federal securities laws. Eskind was subsequently barred by the Commission from association with any investment adviser. That case was based upon allegations of fraudulent conduct by Eskind which included misappropriating investors' funds, failing to disclose that Eskind had been suspended by the New York Stock Exchange ("NYSE") in 1991, and inducing at least five investors to invest at least $500,000 in what was falsely represented to the investors to be a specified limited partnership. In fact, Eskind had been previously terminated from that partnership. The complaint further alleges that subsequent to being enjoined, and continuing until the present, Eskind has raised at least $3 million through sales of limited partnership units in Capital. Capital purportedly does business by trading in securities through initial or secondary public offerings. The sales materials misrepresent to investors Eskind's broker-dealer experience, and do not disclose his 1991 NYSE suspension, the Commission's 1997 civil action or the Commission's 2000 order barring him from association with an investment adviser. The complaint alleges that investors were told that IRA accounts had been opened for them at a trust company which serves as an IRA custodian and have received statements from Lorus indicating their funds in those accounts. In fact, no such accounts have been opened. The sales materials falsely state that a major law firm provides legal representation for Lorus. Finally, the complaint alleges that Lorus is an investment adviser and Eskind's continuing association with Lorus is a violation of the Commission's 2000 order.